Drewry: Transatlantic container rates bucking downward trend

Rates between Asia and the United States, Europe and the Mediterranean all declined considerably last week compared with the same period a year ago, but rates from Europe to the U.S. East Coast soared 16 percent year-over-year.    Container spot rates in the transatlantic trade between Europe and the United States are bucking the recent trend of large declines, according to Drewry’s World Container Index (WCI), which measures ocean freight pricing on eight major east-west trade routes.
   According to the latest WCI composite reading, rates across all eight routes fell a combined 8 percent last week compared with the previous week, leaving them down 14 percent from the same period a year ago. At $1,415 per FEU, the composite WCI was also down $52 compared with the index’s five-year average.
   The price to send a single box from Shanghai to Rotterdam stood at $1,391 per FEU as of March 29, 2018, a decrease of 2 percent on a sequential basis and 8 percent year-over-year. Rates from Shanghai to Genoa, meanwhile, slid 6 percent month-over-month and 8 percent from the previous year to $1,213 per FEU.
   Transpacific rates took the biggest tumble, with pricing from Shanghai to Los Angeles falling 19 percent on both a sequential and year-over-year basis to $1,045 per FEU, while Shanghai-New York rates dropped 12 percent and 25 percent, respectively, to reach $2,019 per FEU.
   Rates on the transatlantic trade, however, were the lone bright spot for the WCI. At $2,070 per FEU, rates between Rotterdam and New York remained unchanged from the week before, but were up 16 percent compared with the same 2017 period.
   Much has been written lately about the recent precipitous decline in both contract and spot container freight rates, particularly in the eastbound transpacific trade.
   Some analysts have posted that the current rate behavior is indicative of a continued imbalance of supply and demand in the industry, while others have argued that it’s simply a matter of typical seasonal ebbs and flows in demand, but the truth of the matter is that both are actually accurate descriptions of the current state of the market.